Aren’t pensions worth a mention in this election?




Why has there been so little comment this election campaign on pensions?

When the rabbit came out of the hat in #Budget2014, many thought the freedom of pensions was the Conservatives great “retail offer”. Has Steve Webb diluted its political impact or are the Conservatives getting cold feet?

Auto-enrolment was one of the few unequivocal public policy success stories of the past parliament. Opt-out rates have stayed low, compliance to the complicated regulations has been high and confidence in retirement savings has been increased with the numbers saving privately increasing from 30 to 49%. Why is neither Clegg nor Cameron pointing to this?

The basic state pension has been reviewed, overhauled and simplified so that next year we will have a benefits, which while not more generous, is at least comprehensible. The application of the triple lock over the term of this parliament has increased the value of the basic state pension in real terms – IN A TIME OF AUSTERITY. With the Conservatives being portrayed as the party of welfare cuts- why is more not being made of the improvements in the Basic State Pension?

There are a raft of DC reforms , most importantly around the abuses of DC pensions (commission, consultancy charging, AMDs and the lack of governance of contract based plans. All of these are consumer focussed and, other than they have reduced intermediation, well received. Consumers are getting a better deal out of the workplace pensions into which 4.5m new savers have been enrolled.

Finally, the process has been put in place for a new kind of collective pension to develop. The development is early stage as auto-enrolment was early stage in 2010. I remember many sceptics in 2010 talk about auto-enrolment in the same way as they talk about CDC today.

Those who complain about CDC also complain about giving people pension freedoms. This is totally illogical. If people cannot manage the freedom of drawdown but reject the captivity of rigid benefits (especially annuities), what do these people want but a third way?



Why is pension a non issue?

While I don’t suppose that pensions policy is touching buttons like the NHS or the fiscal deficit. it is an area of policy about which we have seen genuine changes in the past five years which demonstrate how two parties can work together to take forward policies initiated in a third party (Labour) Government. In truth none of the policies listed above has been opposed by Labour in a meaningful way.

The Shadow Pension Minister, Gregg McClymont has persevered in urging the Coalition to accelerate these policies, release NEST from its restrictions, cap the cost of pension spending and impose more stringent prescription on the charges within workplace pension savings plans.

They support CDC, improvement in the state pension and auto-enrolment (which after all was their idea).

UKIP and the SNP, the new forces in British politics have decided to leave “pensions”out of their manifestos , other than the SNP aiming to protect the state pension age at current levels (which is fair enough looking at Scottish longevity relative to that down south).

Worth mentioning pensions.

In the debates I listen to, I hear a lot of arguing and a lot of moaning from audiences about the amount of arguing.

Politicians seem to be in a vortex of self-defeating recrimination. They point to stark choices with the risks associated of taking the wrong choice being severe.

But in pensions there are no choices to be made, there is harmony, there is success.

It is worth pointing out that where the focus of the politicians is on delivering public good, consensus tends to follow. The coalition has been good for pensions and Gregg McClymont has been a party to the success.

It is very sad that Gregg looks unlikely to be able to participate (immediately) in the new Government. This is an accident of time and no reflection on Gregg or his team. If by a miracle he wins Cumbernauld, he will undoubtedly be the next pension minister and likely to be a very good one.

To those who say that politicians are all the same and that nothing good comes out of Westminster, it’s worth mentioning pensions.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to Aren’t pensions worth a mention in this election?

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  2. Gerry Flynn says:

    Yes the State Basic Pension has be overhauled, (which it needed to be), but how many people are actually going to benefit post 2016, certainly not those millions who were Contracted out which I have mentioned before.

    You talk about consensus, we had consensus between the political parties with the creation of SERPS during the 70’s, only for it to be undermined during the 80/90s. We also had the best private pension system in the world, but that again was hung out to dry on the political dogma of “Freedom of choice”, now where have I heard those same words recently? The scandal of the miss selling of Personal pensions,the antics of the Capt Bob the bouncing Czech and the continued interference of central Government has done a lot of damage to the kudos of pensions from which we are still recovering.

    If there is one thing that I have learned from dealing with people with regard to pensions over the last 30+ years is that they want some form of certainty, they want to know what they are going to get when they retire, it’s human nature.

    What we have got now and possibly for the foreseeable is not going to satisfy that craving.

  3. henry tapper says:

    If we want more certainty, I’d suggest we get behind CDC – it will take time to introduce, but it’s the way we can bridge the gap between annuities and drawdown

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